Some 2,200 truckloads of produce in cold storages
The jaggery market in Anakapalle, one of the biggest in the country with a turnover of some Rs.100 crores, faces a glut of stocks. According to estimates, some 2,200 truckloads (of 10 tonnes each) of stock is in the cold storages in anticipation of the stock fetching Rs.3,500 to Rs.4,000 a quintal.
The price climbed from Rs.2,700 a quintal in December to Rs. 3,200 before Sankranti. Until March 15, it sold between Rs.2,600 and Rs.2,900 and fell to Rs.2,200 in April.
The overstocked trade has to also contend with about 15,000 to 20,000 lumps of fresh arrivals every day.
Trade circles attribute the situation to the estimates that have gone wrong for sugarcane production and good recovery rates not only in Anakapalle but also in major states like Uttar Pradesh and Maharashtra. All the areas experienced good production and recovery rates that signify quality of sugar.
As a result, Uttar Pradesh and Maharashtra, two major sugar-producing states, have contributed 40 lakh tonnes more than expected. At Anakapalle, where a 25 per cent less production is expected, the output is more than that of last year.
The inventory has been raised based on the forecast when the commodity was in short supply that sugar price may cross Rs.5,000 a quintal and correspondingly jaggery price would also shoot up. But the production scenario belied that expectation, says Butchiraju. Estimates for those who stocked up before mid-March put the loss between Rs.500 and Rs.700 a quintal.
“With the unexpected turn of events, traders who purchased at prices ranging from Rs.3,200 a quintal to Rs.2,800 hoping for a hike are in for a shock with the price falling,” says Korukonda Butchiraju of Immidisetti Ramakrishnaiah Sons of Anakapalle.
At other major markets like Mandya and Latur too the production was quite high. Latur produced 8 lakh lumps of jaggery against three lakh tonnes last year. Mandya and other markets like Madurai and Tiruchirapalli have summer crop coming in and competitive price could hit the overstocked Anakapalle market, traders fear. In spite of the glut, jaggery is selling around Rs.40 a kg because premium jaggery in retail market commands good price. Traders hope to offload the stocks once the fresh arrivals stop, sometime towards the end of May, when the price is expected to improve.